Not Sure How to Buy Stocks? Our Beginners Guide to Getting Invested

Investing is one of the best ways to build wealth over time. Let’s face it—winning the lottery or receiving a big inheritance probably won’t happen for most of us. That’s why it’s important to get started investing in the stock market as early as possible. The sooner you begin, the more your investments can grow through compound interest, making it easier to reach your financial goals.

Still, investing can feel overwhelming, especially with confusing terms like mutual funds, market prices, share prices, and robo-advisors.

But here’s the good news: Investing doesn’t have to be complicated. This beginner’s guide will clearly explain how to buy stocks, making it easy to get started—even if you’re brand new to investing.

For the Unbelievers

If you’re skeptical about the benefits of investing, here are some fun facts.

• Between 1928 and 2024, a $100 investment in the S&P 500 grew to approximately $1,139,936. Despite this growth, the market experienced significant downturns, including declines of 20% or more during various periods. This history underscores the importance of consistent, long-term investing to navigate market fluctuations.
• Surprisingly, the best three-year stretch for stock investors occurred during the Great Depression. The second-best was the three years starting in 2009, following the Great Recession. Both periods highlight how stocks can rebound strongly after significant declines.
• Stocks rose 1,100 fold over the past 70 years.
• If you bought 10 shares of Apple at its IPO in 1980 for $220, after five stock splits, you would own 2,240 shares as of 2024. With Apple’s stock price at approximately $250.14, your investment would be worth about $560,313, representing a return of over 254,588% on your initial investment.

Convinced? Good! Let’s start investing.

Get Your Feet Wet with Robo-Advisors

We get it—investing can seem intimidating, so let’s make it easy for you. All you need to start investing online is a few dollars and internet access. There’s no need to open a complicated brokerage account, spend hours researching stocks, or pay costly fees to a financial advisor. Today’s investing platforms let you begin building your financial future quickly, easily, and affordably, even if you’re brand new to investing.

What is a Robo-Advisor?

Robo-advisors are online platforms that use computer programs to help manage your investments automatically. They require little human involvement, making them a cost-effective way to invest based on your financial goals and risk tolerance.

Robo-advisors are known for their low fees, usually charging between 0.25% and 0.50% annually to manage your investments. This is much cheaper than the 1% to 2% typically charged by human financial advisors, making robo-advisors a great option for affordable investment management.

Investment fees might seem small, but even just a 1% annual fee can cost you tens of thousands of dollars over decades, potentially eating away nearly 30% of your returns.

Robo-advisors keep fees low by investing your money in mutual funds or ETFs, using a passive strategy called Modern Portfolio Theory. This method helps balance risk and growth, making robo-advisors an affordable, easy way to invest your money for the long term.

Modern Portfolio Theory (MPT) is a strategy that helps investors create a portfolio of investments that reduces risk through diversification while aiming for optimal returns. By combining different assets, MPT allows investors to manage risk more effectively and achieve better returns based on their risk tolerance.

When you use a robo-advisor, your investment portfolio is customized to match your comfort level with risk. If you’re willing to take on more risk, your portfolio will likely include more stocks and fewer bonds, as stocks offer higher potential returns but come with greater volatility.

Robo-advisors help reduce your overall risk by spreading your investments across different assets. This balanced approach not only protects your money but also provides more stable growth over the long term.

A Little Risk Into Every Life Must Fall

When deciding how much investment risk is right for you, consider your age. Generally, the younger you are, the more risk you can afford because you have more time to recover from market fluctuations.

A simple guideline is the “100 minus age” rule, which suggests investing the resulting percentage in stocks. For example, at age 30, you might put about 70% of your money in stocks. However, remember that this rule is just a starting point and should be adjusted based on your personal risk tolerance and financial goals.

These are the robo-advisors we like.

Acorns

Acorns lets you invest small amounts by rounding up your purchases to the nearest dollar and investing the spare change into a diversified portfolio.

With Acorns, you can link your debit and credit cards to round up your purchases to the nearest dollar. For example, if you buy something for $2.25, Acorns will set aside $0.75 for investing.

You can automate this process or choose which purchases to round up manually. The money for investments comes from your linked checking account once your Round-Ups reach $5.

With Acorns, you can invest a lump sum or set up recurring deposits to automate your investments. Additionally, Acorns offers a cash back program through partnerships with over 250 companies, including Barnes & Noble, Expedia, and Lyft. When you shop with these partners using a linked card, they invest cash back into your Acorns account.

Each time your Acorns Round-Ups reach $5, the money is transferred from your linked checking account and invested into one of Acorns’ diversified portfolios. These portfolios are automatically rebalanced to maintain your target risk level and include automatic dividend reinvestment, helping your investments grow over time.

You don’t have to make many decisions when choosing your portfolio. The choices are:

• Conservative: Approximately 20% Stocks, 80% Bonds
• Moderately Conservative: Approximately 40% Stocks, 60% Bonds
• Moderate: Approximately 60% Stocks, 40% Bonds
• Moderately Aggressive: Approximately 80% Stocks, 20% Bonds
• Aggressive: Approximately 90% Stocks, 10% Bonds

When you create your account, Acorns will ask a few simple questions and based on your answers, recommend one of these portfolios, but you’re free to choose for yourself.

Acorns charges flat monthly fees based on your subscription tier:

• Bronze: $3/month
• Silver: $6/month
• Gold: $12/month

Even if you just use the Round-Ups feature, Acorns will take you from a non-investor to a regular investor, and that’s a significant first step.

Betterment

When you create your Betterment account, you’ll answer a few questions about your investing goals. Based on your answers, Betterment will recommend an asset allocation, which you can adjust using a slider to set your preferred stock-to-bond ratio.

Betterment offers four portfolios:

• Core Portfolio is a diversified mix of stock and bond ETFs suitable for most investors. Updates are coming in 2025 to align with changing market conditions.
• Socially Responsible Portfolios focus on companies with strong environmental, social, and governance (ESG) practices, available in Broad Impact, Climate Impact, or Social Impact themes. These portfolios will also see updates in 2025.
• BlackRock Target Income Portfolio consists entirely of bonds, aiming to provide stable income with lower risk.
• Goldman Sachs Smart Beta Portfolio is designed for investors comfortable with higher risk, targeting potential market-beating returns.
• Innovative Technology Portfolio invests specifically in cutting-edge tech companies to achieve aggressive growth. This portfolio will also undergo updates in 2025.

You’ll link your checking account to your Betterment account, allowing immediate transfers or automated deposits. There’s no minimum deposit required to open your account, but you’ll need at least $10 to start investing.

When you invest with Betterment, your money buys Exchange Traded Funds (ETFs) based on your chosen asset allocation. Betterment automatically reinvests dividends and rebalances your portfolio to keep it aligned with your goals. They also offer tax-loss harvesting to help reduce your tax bill.

The annual fee is 0.25% for accounts with balances over $20,000 or recurring deposits of $250/month. Otherwise, it’s $4/month. For those with $100,000 or more, Betterment’s Premium plan offers unlimited access to financial advisors for a 0.65% annual fee.

Wealthfront

We all have financial goals—short-term goals like saving for a vacation, medium-term goals like buying a home, and long-term goals like planning for ∫. While many investing platforms help you save, Wealthfront goes further by providing tailored guidance to keep you on track.

To set up a Wealthfront account, you’ll complete a short questionnaire to assess your risk tolerance, which is then used to create a personalized investment strategy. The minimum deposit to open an account is $500.

Wealthfront invests your money in ETFs using Modern Portfolio Theory, aiming to maximize returns while managing risk. Your portfolio is automatically rebalanced to stay aligned with your goals, and tax-loss harvesting is available to help reduce your taxable gains.

Portfolios are highly diversified across multiple asset classes, including real estate and natural resources. This broad diversification helps manage risk and improve long-term return potential.

Wealthfront’s Path is a free financial planning tool that helps you achieve your goals. By linking your financial accounts, Path provides personalized advice based on your savings, spending, and targets. It shows how your habits affect your progress and offers recommendations to keep you on track.

Wealthfront charges a flat 0.25% annual fee to manage your investments, but the first $5,000 is managed for free. This fee applies to automated investment accounts, which require a $500 minimum deposit to open.

Choosing Individual Stocks

When you invest through a robo-advisor, you don’t get to pick individual stocks—the platform does it for you. But if there’s a specific company you’re excited about, like Apple or Amazon, you can still invest in it on your own through a brokerage account.

The trick isn’t buying stocks—it’s knowing which ones to pick. A good starting point is to focus on companies you already know and use. Think about the brands you trust or the services you rely on every day. If you understand how a company makes money, you’re already ahead.

Start by choosing a few companies you’re genuinely interested in and begin researching their businesses. You’ll want to learn how they operate, where their money comes from, and whether they’re growing.

Not sure where to start your research? Don’t worry—you don’t need to dive into financial newspapers right away. In fact, if you’re new to investing, those can feel like a foreign language. Instead, stick to simple steps like these:

• Visit the company’s website: Check out their products, services, and what they say about themselves in the investor section.
• Look at recent performance: Search for charts that show how their stock has moved over time and what’s affected it.
• Read basic summaries: Find easy-to-understand articles or videos that explain what the company does and how it’s doing financially.
• Watch for trends: See if the company is growing, launching new products, or expanding into new markets.

Once you feel confident, you can decide if a stock is worth buying. Starting with what you know keeps things simple and helps you feel more in control of your investment decisions.

One resource we recommend is Simply Wall Street. The site transforms complex financial data into easy-to-understand infographics, making stock analysis more approachable.

Beyond just share prices, Simply Wall Street provides comprehensive insights into various aspects of a company, including:

• Value: Assesses a company’s worth based on future cash flows and its price relative to the stock market.
• Future: Evaluates expected performance over the next 1-3 years, drawing from estimates by up to 50 analysts.
• Past: Reviews earnings performance over the previous five years.
• Health: Analyzes financial health, including debt levels and balance sheet stability.
• Income: Details current dividend yield, its consistency, and sustainability.
• Management: Examines the tenure of board members, CEO compensation, and any insider trading activities.
• Discounted Cash Flow: Projects future earnings and calculates their present value, accounting for inflation.

This platform serves as an excellent resource for both novice investors and seasoned professionals, offering a holistic view of potential investments.

DIY Stock Buying

Once you’ve done your research and picked a stock, buying it online is pretty simple. Just open a brokerage account, add money to it, and place your order. Most platforms walk you through it step by step.

Robinhood

Robinhood is an app that lets you make free trades—no fees, no commissions. It only takes a few minutes to open a new account and link your bank account.

There’s no minimum deposit required, but you’ll need enough money in your account to start buying stocks. You can fund your account manually or set up automatic deposits for convenience.

You’ll be asked a few quick questions about your investing goals, but Robinhood doesn’t offer pre-set portfolios. While you can view basic trading data in the app, it doesn’t show deeper company fundamentals. Tools like Simply Wall Street are more helpful for that kind of insight.

When you’re ready to buy, the process is simple:

• Search the stock: Type in the symbol of the company you want, and you’ll see the current price.
• Tap Buy: Click the Buy button to go to the order screen.
• Enter your order: Type in the number of shares and choose your price. Tap Market to switch to a limit order if preferred.
• Submit the order: Review everything and swipe to place your trade.

Fidelity

Fidelity offers a well-rounded investment platform with low costs and robust research tools. They provide commission-free online trades for U.S. stocks and ETFs, with a $0.65 fee per options contract. Opening an account is straightforward, requiring no minimum deposit, so you can start investing with any amount.

One of Fidelity’s standout features is its comprehensive research. They aggregate insights from over 20 independent providers and present a consolidated Equity Summary Score on stock quote pages. This score simplifies complex data, aiding both novice and seasoned investors in making informed decisions.

When you’re ready to execute a trade, Fidelity’s platform is intuitive:

• Initiate the Order: Use the dropdown menus to complete the online order form.
• Preview and Confirm: Before finalizing, you’ll have the opportunity to preview your order.
• Confirmation: After placing the order, a confirmation screen will appear, which you can print or review online at any time.

This combination of low fees, comprehensive research, and user-friendly tools positions Fidelity as a strong choice for investors seeking both value and depth in their trading experience.

After placing a trade with Fidelity, a confirmation screen will display your order number and trade details. You can print this for your records or view it online later. Trade confirmations are available online and can also be mailed to you upon request.

Fidelity has modernized its platform to appeal to younger and beginner investors. The Fidelity Youth® Account is a notable feature, designed for teens aged 13–17 to manage and invest their own money with parental oversight. This initiative helps the next generation learn about investing responsibly. Teens can invest with as little as $1 using fractional shares, and the account offers educational tools to foster healthy financial habits.

Model Portfolios You Can Replicate

If you want to enhance your stock-picking skills, consider building a model portfolio inspired by financial experts like Ray Dalio, David Swensen, and Larry Swedroe.

Here are some of the most discussed portfolios you can incorporate into your investment strategy:

• Swensen Portfolio: Developed by David Swensen, this portfolio combines domestic stocks, international stocks, emerging markets, bonds, and REITs, mirroring strategies used by the Yale Endowment.
• Larry Portfolio: Associated with Larry Swedroe, this portfolio emphasizes rebalancing strategies to optimize returns.
• All Weather Portfolio: Popularized by Ray Dalio, this portfolio balances stocks, bonds, gold, and cash to perform well across economic conditions.
• Coffeehouse Portfolio: Bill Schultheis created this portfolio, which focuses on simplicity and low costs. It uses a mix of domestic stocks, international stocks, and bonds for long-term stability.
• Ivy Portfolio: Inspired by Ivy League endowments, this portfolio involves tactical asset allocation to maximize returns while minimizing risk.
• Permanent Portfolio: A strategy that typically includes stocks, bonds, gold, and cash to provide stability across different market conditions.

These portfolios are well-regarded for their diverse approaches to investing and can be valuable additions to your investment strategy.

All-Weather Portfolio

This portfolio's single goal is to make money in all market conditions regardless of interest rates, deflation, what new pandemic is threatening our shores, or who the POTUS is. It does this by focusing on growth and inflation cycles.

Invest in this portfolio

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Smart Investing for Every Skill Level

​At Listen Money Matters (LMM), we often recommend robo-advisors, especially for those new to personal finance. Starting early is crucial, as time in the market is a key factor in building wealth.

Robo-advisors provide an accessible and straightforward way for beginners to begin investing without extensive financial knowledge. Delaying investments can result in missed opportunities for growth, so we encourage immediate action to maximize potential returns.

Robo-advisors are one of the easiest ways for beginners to start building wealth. If you’re just getting started, we recommend sticking with the robo-advisors we’ve vetted—they’re simple, low-cost, and do the heavy lifting for you.

That said, there’s definitely room for individual stock investing in your financial plan. Does it take more time, research, and confidence? Yes. Should a complete beginner dump their entire $10,000 savings into stocks? Absolutely not. But using a portion of your discretionary income to invest in companies you believe in can be a smart move.

If you’re planning to use Robinhood for free trades, make sure you also use Simply Wall Street for solid research. And if you want a platform that combines trading with in-depth analysis, Fidelity is a great option.

Bottom line: investing is for everyone. Whether you’re brand new or more experienced, there’s a platform that fits your style and goals. Now, start investing!